Monday, March 17, 2008

The Taxpayers' Alliance

A story has appeared in The Guardian this morning, which starts like this:The TaxPayers' Alliance, which claims to be "Britain's independent grassroots campaign for lower taxes", has popped up in our papers more than three times every day this year. This is rather more than the five mentions this year of the Tax Justice Network, an independent coalition of researchers who focus on tax avoidance and tax havens. Last month they were 100 stories ahead of the next most mentioned charity/pressure group. So far, journalists have yet to tire of the TPA's "this is a slap in the face for taxpayers" refrain.

It is nice to be mentioned once again - although we have of course been mentioned many more times than that (we're not offended, honest!) TJN and the Taxpayers' Alliance share some common ground: simplicity on tax is one shared objective, for example. But much of what they say makes them look like a lobby group for those advocating tax loopholes. They defend the private equity industry ("we felt the need to come to their defence"), whose bread and butter is to use financial engineering to escape taxation. They support the repeal of the inheritance tax (which Andrew Carnegie described like this: "Of all forms of taxes this seems the wisest;") The Taxpayers' Alliance are vigorously opposed to co-operation with Europe on tax matters - a stance that pits them against the world's most effective body fighting the global tax haven scandal - and they have precious little sensible to say on the subject of domicile. TJN has no particular problem with tax-cutting - as long as it does not go too far, and as long as the wealthier sections of society pay their share - which they manifestly don't in Britain. The Taxpayers' Alliance claims to be supporting ordinary, hardworking taxpayers - but the fact that they say little about tax havens, domicile, or corporate tax avoidance makes us wonder: which taxpayers are they really supporting: the taxpayers or the non-taxpayers? It looks rather like the latter.

And what is the secret of their success? The Guardian continues:Their real success is media coverage. As well as providing comment, says Elliott, the TPA uses freedom of information laws to compile headline-grabbing reports, always giving an obvious "top line". "One journalist told me the TPA now does the work newspapers used to when journalists had the time to do investigations," he says. If the TPA gets a free ride in the press, it is only because it's made things so easy for hard-pressed/lazy (take your pick) reporters. "We are always available 24 hours a day," says Elliott. "We put the work in so we get good coverage."

Is this true of British journalists? TJN knows a number of hardworking, high quality and dedicated British journalists. There are many of them, and many fine things that are written. Here is one recent example of top-class British journalism in the London Review of Books (LRB). It is a review of a book called Flat Earth News which is about . . . British journalism. The LRB explains:

His book starts at the point at which he got interested in the story of what he calls ‘flat earth news’: ‘A story appears to be true. It is widely accepted as true. It becomes a heresy to suggest that it is not true – even if it is riddled with falsehood, distortion and propaganda.’ That’s flat earth news, and Davies became interested in the phenomenon, via the story of the millennium bug. How on earth did so many papers get sucked into producing so many millions of words of, it turns out, total nonsense about the impending implosion of all government, all commerce, all human activity, by the catastrophe which was going to be caused by the bug?Davies chooses to focus on the fact that of the millions of words written about the bug, all of them were written by journalists who had no idea whether what they were writing was true. They simply didn’t know. Flat Earth News makes a great deal of this. The most basic function of journalism, in Davies’s view, is to check facts.

Davies recruited some researchers at Cardiff University’s school of journalism who looked at a fortnight’s production from a number of British papers, and analysed 2207 UK news pieces. They focused on two things: the number of stories that were derived directly from press releases; and the number that were taken straight from the main British news agency, the Press Association. The results were surprising:They found that a massive 60 per cent of these quality-print stories consisted wholly or mainly of wire copy and/or PR material, and a further 20 per cent contained clear elements of wire copy and/or PR to which more or less other material had been added. With 8 per cent of the stories, they were unable to be sure about their source. That left only 12 per cent of stories where the researchers could say that all the material was generated by the reporters themselves. The highest quota proved to be in the Times, where 69 per cent of news stories were wholly or mainly wire copy and/or PR . . . The researchers went on to look at those stories which relied on a specific statement of fact and found that with a staggering 70 per cent of them, the claimed fact passed into print without any corroboration at all. Only 12 per cent of these stories showed evidence that the central statement had been thoroughly checked.

So only 12 per cent of what is in the papers consists of a story that a reporter has found out and pursued on her own initiative; and only 12 per cent of key facts are checked. The rest is all rewritten wire copy and PR. This remaining 88 per cent is, in Davies’s stinging coinage, ‘churnalism’.

Now this would not necessarily be a tax justice story, but for the fact that when facts are checked infrequently, the best-resourced organisations will have a very significant advantage in shaping opinion. How much money does the Taxpayers' Alliance have? Well, we looked around their website and we couldn't find out how much money they have. They are clearly supporters ofthe libertarian American lobby groups the Cato Institute and the Center for Freedom and Prosperity, two of the most thuggish cheerleaders for corporate loopholes the world have ever seen. Loophole lobbyists find it rather easy to find sponsors: Cato, for instance, promotes tax competition between countries despite the economic fallacy at the heart of their lobbying, they support crime havens ("Liechtenstein has a tax code that rewards productive behavior") and they cheerfully admit that

Cato's 2005 revenues were over $22.4 million, and it has approximately 95 full-time employees, 70 adjunct scholars, and 20 fellows, plus interns.

If TJN had a hundredth of the revenues available to Cato and the Center for Freedom and Prosperity, we would be delighted. But the funny thing is: we are an absolutely tiny organisation - and yet our message is spreading, fast. These people simply have no answer to the agenda TJN is setting. If the Taxpayers' Alliance were honestly batting for the ordinary taxpayer, then their positions would be easier to defend. They are certainly lobbyingon behalf of some taxpayers. Those taxpayers don't look like the ordinary ones, though.

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About Me

The Tax Justice Network (TJN) is an international, non-aligned network of researchers and activists with a shared concern about the harmful impacts of tax avoidance, tax competition and tax havens.
www.taxjustice.net